DHL takes 2-wheeled ride to Southeast Asian growth

DHL is making headway in Southeast Asia’s highly competitive ground shipping market largely by adopting a so-called microdelivery model employing motorcycles.

In the two years since entering Thailand’s door-to-door-delivery sector, DHL has built up a network of 200 service locations and will raise the tally to at least 1,000 this year. It has also amassed a fleet of motorcycle couriers, recognizable by the yellow shipping containers on their bikes.

“I feel at ease whenever I see the DHL logo,” said a 43-year-old man who frequently purchases clothing and electronics online.

Retailers have similarly warm sentiment. “Delivery satisfaction is directly linked to an online store’s ratings,” said a representative of a womenswear seller that does business with DHL.

DHL has already established a strong track record in Thailand through its international air transport and corporate-client logistics businesses. Its regular local staffers number more than 500.

The package volume DHL handles for e-commerce clients has climbed to 15 million units a year. DHL can pick up and pack an item for a seller when needed, and deliver the item to the recipient in one or two days. Customers can pay with cash upon receiving the item.

This type of home delivery service has yet to fully take root throughout Southeast Asia. DHL has sought to get a head start by setting up shop in Malaysia and Vietnam last year. It now has 1,000-plus service locations in three countries, with short-term plans to expand the network to thousands of locations.

Online shopping is on the verge of igniting the home delivery business in Southeast Asia. The home delivery market in six key nations of the region will grow to $7.5 billion in 2020, or more than double 2015 levels, according to Nomura International (Hong Kong). Online retailing’s share is expected to rise to 38% from 15%.

“There is currently no single global player in e-commerce logistics that is able to offer an end-to-end solution from fulfillment, cross-border to last-mile delivery” besides DHL, said Charles Brewer, CEO of DHL eCommerce.

The DHL group also has the Chinese market, where it established a footprint before heading to Southeast Asia. “China has massive growth potential for outbound cross-border e-commerce,” Brewer said. Southeast Asia, with its population of 600 million, is key to realizing its promise.